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business
Tuesday Jun 16 2020
By
Web Desk

Preliminary report holds private oil companies responsible for petroleum crisis

By
Web Desk

The preliminary report on the petrol crisis has held private oil companies responsible for black marketing and hoarding of petroleum products, recommending strict action against them.

In its initial findings, the joint investigation committee has recommended that strict action be taken against oil companies for installing dangerous storage tanks for petroleum products near private oil terminals. 

The report states that in the crisis on PSO’s oil terminals were operating 24 hours a day during the crisis, adding that its market shares before the shortage in supply ranged between 32% to 36%. 

However, the increase in supply of oil during the petroleum crisis enhanced its market share to 54%. The report added that the three private companies against whom cases have been filed had a large piece of the market share which declined during the petroleum crisis.

Government fines six oil companies for petroleum crisis

Last week, the government fined six oil marketing companies (OMCs) with Rs40 million for their non-compliance with storage requirements, bringing to an end a month-long blame game after an adverse shortage of petrol and diesel amid the lockdown in the country.

Shell Pakistan and Total Parco were each fined Rs10 million, while Attock Petroleum, Puma, Gas and Oil Pakistan and Hascol were imposed a penalty of Rs5 million each, according to the Oil and Gas Regulatory Authority (Ogra). Three show-cause notices were also issued to OMCs, including Byco and BE Energy.

Ogra said these OMCs were found involved in a violation of their licenses and directed to pay the penalty within a month. OMCs could file review petition only after paying half of the penalty, the regulator said.

The authority warned OMCs of further penalties if they could not improve the supplies at their outlets.

Also read: Petroleum crisis to be over in next 3 days, claims Omar Ayub

The Oil Companies Advisory Council, an informal body representing the downstream oil industry, declined to comment on the next line of action.

Ogra’s decision followed show-cause notices issued on June 3 to the OMCs to explain their position regarding the availability of petroleum products at their retail outlets.

The petroleum division of the energy ministry also constituted a committee to probe into the shortage of petrol and diesel.

“The team visited Keamari and Port-Qasim port on June 9 and found more than 40 million litres of petrol at Keamari in the tanks which had not been moved by Hascol Petroleum Limited and Gas and Oil Pakistan Limited,” a spokesperson of the ministry had said last week.